The Economic Foundations of European Defence in the 2021– 2027 Long-term EU Budget

Abstract

The European Commission proposed the establishment of the European Defence Foundation (EDF) on 30 November 2016, as a part of the European Defence Action Plan
(EDAP). The reason for the new proposal was the hitherto measured lowest defence expense level of the Member States in 2015 (GDP 1.4 per cent) as well as the recognition of the hiatus of the estimated sum of 13 billion EUR being invested for a decade in defence purposes, in reflection to the fact that the US, Russia and China have been ambitiously improving their defence capacities in the meantime. In June 2017, the bill for the establishment of the European Defence Fund found acceptance. As a result, the program appears, without precedent, in the budget of the interval between 2021 and 2027. Until the final decision of the multi-year foundation framework (MFF), the
conclusion applies that the program will operate with expense rate 13 billion EUR, as well as with a 10.5 billion EUR off-budget rate. For Hungary the 123 million EUR budget will provide for capacity improvement, and the research support could enhance the modernisation of the military forces along with the reinforcement of the country’s geopolitical status.